In the latest government securities auction held on 20 June 2025, the Reserve Bank of India successfully raised Rs 27,000 crore through two issuances: the 6.75% GS 2029 and the 7.09% GS 2054. The response from the market was robust, particularly for the longer-tenure 2054 paper, which drew significant interest from institutional investors.
For the 6.75% GS 2029, the RBI had set a notified amount of Rs 15,000 crore. A total of 198 competitive bids poured in, amounting to Rs 38,560.61 crore, more than twice the intended amount. Ultimately, 83 bids were accepted, resulting in a final allocation of Rs 14,994.54 crore. The cut-off price was set at 102.85, translating to a yield of 6.0176%. The weighted average yield for this bond stood slightly lower at 6.0100%, indicating keen demand at tighter spreads. Partial allotments were made to 22 bids, with a cut at 26.13%, while non-competitive bidders were allotted Rs 5.46 crore from a pool of five accepted bids. No underwriting support was tapped, and there was no devolvement on primary dealers.
The 7.09% GS 2054 bond, with a notified amount of Rs 12,000 crore, saw even greater enthusiasm. The RBI received 304 bids totaling Rs 47,923.60 crore, nearly four times the notified amount. Of these, only 44 bids were accepted, leading to an allotment of Rs 11,981.27 crore. The cut-off price for this bond was 100.46, implying a yield of 7.0517%, while the weighted average yield came in marginally lower at 7.0485%. Partial allotments were made to 11 bidders, at a rate of 34.75%. On the non-competitive front, eight bids were accepted, amounting to Rs 18.735 crore. Interestingly, the underwriting commitment of Rs 12,000 crore was fully accepted, though no devolvement on primary dealers occurred.
The auction results suggest a market leaning towards long-duration government paper, likely driven by expectations of rate stability and attractive term spreads.